Background
Katherine Sloan sued Robert Leo Given for specific performance of an agreement under which Given purportedly agreed to sell her his marital home for $10. After a bench trial, the Lane County Circuit Court dismissed Sloan’s claim.
The trial court found that the transaction was intended to prevent Given’s wife from asserting a claim to the home in anticipated divorce proceedings and to oust her from the property, which she occupied exclusively under a restraining order against Given. Given described the agreement as a “ruse,” and Sloan acknowledged that one reason for it was that Given did not want his wife to receive the house. Although the stated price was $10, Sloan valued the property at $140,000 and Given valued it at $300,000.
The Court’s Holding
The Oregon Court of Appeals affirmed, holding that the trial court properly denied specific performance under the doctrine of unclean hands. Specific performance is an equitable remedy, the court explained, and it was the only relief Sloan requested. Her characterization of the dispute as a contract action therefore did not prevent application of equitable defenses.
The court further concluded that the inequitable conduct was sufficiently connected to the transaction Sloan sought to enforce. A conveyance designed to place property beyond another person’s reach can support application of unclean hands even when the intended target is a third party, and a court may invoke the doctrine on its own motion. The absence of a pending dissolution case when the agreement was made did not change the result, particularly because Given filed for dissolution less than 10 days later with Sloan’s assistance.
Key Takeaways
- A plaintiff seeking specific performance is requesting equitable relief and is subject to the unclean-hands doctrine.
- A sham property transfer intended to frustrate a spouse’s potential claims in anticipated divorce proceedings can bar enforcement of the agreement.
- The inequitable conduct may target a third party, and the trial court may raise unclean hands on its own initiative.
Why It Matters
The decision illustrates that proof of an agreement does not guarantee specific performance when the transaction itself was structured for an inequitable purpose. Courts may examine the circumstances and objectives surrounding a purported conveyance rather than treating contract formation as dispositive.
The opinion is a nonprecedential memorandum opinion under ORAP 10.30 and may not be cited except as that rule permits.